Accounting costs Bell $20,000
THE Sydney Futures Exchange yesterday imposed heavy fines on Bell Commodities, emphasising the importance of timely self-reporting to the regulator.
Bell Commodities was fined $8000 for making an error in its accounting records and $12,000 for its delay in reporting it.
"The allocation of penalties reflected the (SFE) committee's view that the disregard of the self-reporting obligation for a period of approximately five months was the more serious offence given the more inadvertent nature of the original accounting error," the exchange decision said.
Bell Commodities made a currency translation error that resulted in undetected depreciation of US dollar investments and an overstatement of the balances in Bell's accounts throughout 2003 and most of 2004.
Neither Bell's management nor its external auditors picked up the error until November 2004, when a foreign exchange loss correction of $700,000 had to be recorded against profits and shareholder funds in Bell's financial statements.
The exchange said the length of time it took to identify the error compounded its impact and highlighted a "fundamental weakness in (Bell's) internal control framework".
But the fact Bell did not report the matter until April 2005, five months after detection, was the more serious breach.
"Bell's senior management should have recognised the obligation to report the matter in November 2004."
Bell Commodities' managing director, Alastair Provan, was not available for comment yesterday.